Skills forecast: trends and challenges to 2030

Cedefop and Eurofound’s joint report on the skills forecast has been released. Cedefop’s skill supply and demand projections provide comprehensive information about the structure of Europe’s labour market and potential future trends. The report presents the findings from the most recently updated projections along with Eurofound’s analysis on the task content of employment, using the jobs monitor approach.

Following the financial crisis, 2017 saw the fifth year of recovery in EU GDP growth. A modest recovery is expected to continue in the near term with GDP growth for the 28 European Union Member States (EU-28), Norway, Switzerland and Iceland (EU-28+3) averaging around 1.8% until 2020 and slowing to 1.4% from 2021 onwards.

The working age population is expected to increase, but there is much variation in trends across countries. Modest employment growth is projected overall but a decline is expected in some countries. Service sectors are expected to be the main drivers of employment growth over 2016-30, while basic manufacturing employment is expected to decline.

Predicted employment trends will drive continued polarisation within the labour market. Significant growth in employment for high-skill occupations (managers, professionals and associate professionals) is expected, together with some growth for less skilled jobs related to sales, security, cleaning, catering and caring occupations. Job losses are projected in medium-skill occupations, such as skilled manual workers (especially in agriculture), and for clerks.

The Eurofound analysis confirms the indications of the main results with regard to job polarisation. The analysis also highlights a shift towards more autonomy, less routine, more information and communication technology, fewer physical tasks, and more social and intellectual tasks over the forecast period to 2030.

Medium-skill occupations are projected to see slow growth or even decline in the number of jobs, as automation and offshoring take their toll. But new workers will still be needed in these occupations to replace those who leave or retire. Replacement demand (RD) rates average 3.7% each year across all countries. The highest rates are in occupations with more seniority (such as managers and senior officials), and in sectors such as agriculture and fishery, with their aged workforces. Summing expansion demand and RD adds up to 158 million job openings to be filled between 2016 and 2030.

The analysis highlights tensions between demand and supply trends. While the problem of overqualification of young graduates may be resolved in the long term, the immediate prospects are for overqualification for many people employed in both high and low-skill occupations. However, it is not easy to measure such phenomena. Overall, there are indications that the supply of those with higher-level qualifications may be growing faster than demand and of those with few or lower-level qualifications.

Cedefop pioneered the first pan-European forecast of skill needs 10 years ago. The European Commission’s continued political interest and financial support allowed Cedefop to develop a sound methodology using harmonised data for all Member States. Today Cedefop’s forecast is well-known and widely used by policy-makers, international institutions, analysts and journalists. It has also inspired several countries in their endeavour to set up or improve their own skills projection systems.